Electronics contract manufacturer Flextronics (NASDAQ:FLEX) $12.32 is seeing downside pre-market action at $10.15 (-17.6% from Monday's close) after warning investors that the cost of relocating production to low cost countries, such as China, and the continued slowdown in technology spending would negatively impact first-quarter earnings. FLEX said as it drives costs down, it should get earnings to the $0.20 EPS range with no increase in revenues and expects to get earnings back to $1.00 per share in EPS on an annual basis. However, for the current fiscal quarter, FLEX expects EPS of $0.05-$0.08 a share on revenues of $3.0 billion, which was below analysts' forecast for the company to earn $0.11 a share on revenue of $3.17 billion.
Both the SEC and NASDAQ are investigating Knight Trading Group (NASDAQ:NITE) $5.92 for "front running," in which employees at the trading firm allegedly bought stocks ahead of orders for customers and then sold them as the share rose. This morning, the stock is getting hit to the downside at $3.90 in pre-market trading (-34% from Monday's close). In an unrelated development, shares of NITE were halted for trading yesterday after the NASDAQ said it was canceling trades in Knight Trading Group because of a software glitch at the market maker.
Earnings warnings and SEC investigations have stocks looking lower this morning as S&P futures trade down 1.5 points at 1,037.30. NASDAQ futures are off 11.00 points at 1,154, while Dow futures buck the morning trend with a 7 point gain to 9,690.
Fair value for the S&P 500 today is $0.15. That price will not change during the session. HL Camp & Company has their computers set for program buying at $1.35 and set for selling at $-1.42. Fair value for the NASDAQ-100 today is $1.37.